Sumitomo Mitsui Banking Corp. (SMBC), the Japanese financial powerhouse, is in advanced discussions to buy a significant stake in Yes Bank, following months of negotiations. The move is expected to trigger an open offer for an additional 26 percent stake of the sixth-largest private bank in India by assets.
The State Bank of India (SBI), which holds 24 percent stake in Yes Bank, has been seeking a new owner following the bank’s turnaround. If the deal goes through, SMBC could become the single-largest shareholder, marking India’s largest banking sector M&A deal.
SMBC has reportedly received verbal assurance from the Reserve Bank of India (RBI) that it will be allowed to retain a majority stake in Yes Bank. However, RBI has clarified that voting rights will remain capped at 26 percent. The deal is expected to be finalized soon, with SMBC’s senior leaders meeting SBI and other key shareholders in Mumbai last week.
This acquisition would be SMBC’s biggest bet in India, following its $2 billion acquisition of Fullerton India Credit in 2021. Yes Bank’s stock performance has been lackluster, closing at Rs 17.73 per share, down 9.5 percent year-to-date.
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Yes Bank is headquartered in Mumbai, catering to retail customers, MSMEs, and corporate clients. The bank was founded by Rana Kapoor and Ashok Kapur in 2003. Its network is spread across 300 districts in India and comprises 1,198 branches, 193 BCBOs and over 1,287 ATMs. The bank has nearly 62 lakh small retail shareholders, holding 22.55 percent stake.